IMO, there is a giant "macro thematic" behind what is happening....

IMO, there is a giant "macro thematic" behind what is happening. You have to look at the really big big picture to put the little things in context.

I don't think I would get much argument that we live in a bipolar world today - as in there is a "world order" centrered around 2 global economic/ military "blocs". One led by the USA (mostly democratic & people led) and other led by China (autocratic and state led) ... and this is not a giant conspiracy theory post ... it has real ramifications of what is likely to happen in Lithium and the greater "Electrification of Everything" movement.

2022 has been the year of "inflation" and "money tightening" (i.e. central banks increasing interest rates, some steeply from the ZIRP that was). Just think about it. Low interest rates means borrowing is cheap (the price of money), more people want to borrow and Gov't is happy to oblige and print more money - so the "money supply" (M2 as economists call it) increases. This is especially true when stimulus packages are enacted - which we have seen in our own Australian economy and in the USA and elsewhere. Now after the Fed has sharply increased interest rates, M2 has begun to decrease (in USA), and companies don't want to borrow, people want to pay off high debts and so money supply shrinks and this will also hurt the economy long after Fed and RBA stop their interest rate rises.

But Central banks really only control demand. Their power is in interest rates. Higher rates curtail demand. Lower demand means lower prices. Lower prices means lower margins and lower margins means lower profits. Pretty striaghtforward I think. And so Goldman puts out a note that suggests prices will drop and blah blah blah as above.

However we a in a supply deficit with Lithium. What's more we are in a structural supply deficit because any "demand reduction" is simply "demand deferral" and not "demand destruction" as is the case for those industries not in the secular change we are seeing (e.g. a decision to buy an EV is a decision NOT to buy an ICE powered vehicle and there's a whole lot more companies "hurt" in that decison than just the auto OEM). Supply cannot keep up with demand and this prices must rise.

All the above is happening with (and or because) COVID in the background as "Supply Chains" come back in focus. The Globalization of the past 30 years is correcting and "deglobalizing" is occurring rapidly. Globalization was deflationary ... prices for everything dropped as productivity increased. Now with supply chains truly tested companies and countries are nationalizing again (and to hell with if it costs more) ... just look at the USA IRA. Prices will naturally increase and IMO thats going to stay around for a while. Inflation isn't going to just go away quickly as it isn't just a function of interest rates in this space.

So sure, Goldman is sort of right in the sense prices generally will go down in a recession, and 2023 is a heading for recession but are they right with the secular change in demand and structural deficit in supply. Its a big call ... wouldn't want to be on the wrong side of it though.